Micron (MU) stock has been in a strong bull run since April 2025, when it bottomed at $62. It has soared to $415, making it one of the top gainers in the S&P 500 Index and Nasdaq 100.
Despite this surge, the stock has more upside in 2026 as the artificial intelligence tailwinds remain. It is also seeing elevated demand for its Dynamic Random Access Memory (DRAM) and NAND memory as the global supply constraints remain.
Micron’s stock upside is also supported by its cheap valuation metrics, bullish analyst forecasts, and its technicals.
Micron Stock is Benefiting From Unprecedented Memory Demand
The ongoing AI spending and data center build-up have more room to run, even as concerns of the bubble bursting remain. In a recent note, Goldman Sachs analysts estimated that AI companies will spend over $525 billion this year.
Memory companies stand to benefit from this boom, which explains why firms like Micron, Sandisk, and Western Digital were the top gainers in the S&P 500 Index in 2025.
These stocks jumped because of the ongoing supply shortage in the High Bandwidth Memory industry, with supply for 2026 being sold out.
In its recent earnings report, Sanjay Mehrotra, Micron’s CEO, noted that it had completed supply and pricing agreements for the year. He also noted that the HBM industry’s total addressable market would jump from $35 billion in 2025 to $100 billion in 2028.
This growth is demonstrated by the company’s earnings, which have continued to beat analysts’ estimates. Its annual revenue grew from $27 billion in 2021 to $37 billion in FY’25, and analysts see it reaching $88 billion in 2027.
Micron’s revenue growth will be accompanied by higher margins as it has higher pricing power. Indeed, in a recent note, analysts at Nomura Securities noted that Sandisk, another top memory company, could double the prices of its 3D NAND memory devices.
The memory industry has always been characterized by booms and busts. This happened as companies boosted their supplies whenever demand rose.
However, the complexity of the current HBM devices means that it is hard to boost supply. In Micron’s case, it will only be able to boost supply in the second half of 2027 when its Idaho fab comes online. It will be followed by the second fab in the state and the new one in New York.
MU Stock is a Bargain in all Measures
It is always difficult to recommend a stock trading at a record high. However, a closer look at Micron’s numbers and growth prospects shows that it is a bargain.
The most recent results showed that Micron’s revenue grew by 57% YoY to $13.6 billion. Its gross margin grew by 11 percentage points to 56.8%.
Wall Street analysts are optimistic that the company has more room to grow. The average estimate is that its second-quarter revenue will grow by 132% to $18.75 billion. Its annual revenue is expected to jump by 98% to $74 billion. Micron’s earnings per share is also expected to soar to $32.9 from the previous $8.29.
Therefore, with such strong numbers and its market share, one would expect a premium valuation for the company. However, data shows that the company has a forward price-to-earnings (P/E) ratio of 11, much lower than other similar companies. SanDisk has a multiple of 32, while Western Digital has 23.
Additionally, the company has a forward price-to-earnings-to-growth (PEG) ratio of 0.22, lower than the industry’s median of 1.06.
Micron’s Rule-of-40 metric also illustrates its valuation discrepancy. It has a forward growth estimate of 98% and a net profit margin of 28%. This gives it a Rule-of-40 metric of 126%, higher than popular AI companies like NVIDIA and Palantir.
Is Micron Stock a Good Buy?
Most Wall Street analysts are largely bullish on Micron’s shares. 25 analysts have a buy rating, while two have a hold. The average target for the stock is $333, representing a ~3.3% drop from the current level.
Micron analyst ratings | Source: TipRanks
However, some recent analysts have boosted their targets, with Mizuho’s Vijay Rakesh moving it from $290 to $390. JPMorgan’s estimate is $350, while Piper Sander and UBS’s targets are $400. The most upbeat analyst is Rosenblatt’s Kevin Cassidy, who sees it rising to $500.
Technicals Suggest a Brief Pullback Followed by a Rebound
While Micron has strong fundamentals, technicals suggest that it will have a brief pullback followed by a rebound. The weekly chart below shows that the stock has gotten highly overbought, with the Relative Strength Index (RSI) and the Stochastic Oscillator moving to their extreme levels.
It also remains much higher than the 100-week Exponential Moving Average (EMA), which is at $138. These indicators mean that a brief pullback, potentially to $300 is possible. It will then bounce back and possibly end the year at $450.
The Bottom Line
Micron stock has been in a strong bull run, helped by the ongoing AI boom and its strong growth metrics. Its revenue and profitability growth will likely accelerate this year as the supply constraints in the memory industry remain.
Most valuation models show that MU is a bargain, while most analyst have a buy rating on the company. These fundamentals mean that the stock has more upside to go.
However, technicals suggest that the stock has become highly overbought, raising the possibility of a brief pullback as investors book profits. Such a pullback may form a good entry point for bulls.
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